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Why investing in women is smart economics 

by Naspers South Africa CEO, Phuthi Mahanyele-Dabengwa

A recent Global Gender Gap Report from the World Economic Forum shows that the gender gap hasn’t recovered from the significant damage done during the COVID-19 pandemic. And as we navigate another period of economic uncertainty, the systemic challenges facing women in the global labour market remain.

While the data paints a difficult picture of working women and their ability to make it to the top, the pandemic had a surprisingly positive effect on female entrepreneurship in some regard.    

There has been a significant surge in female founders globally with women starting their own businesses at a faster rate than men in recent years. Across the world, the share of founders grew by 45% in 2020 compared to 2019 for women and by 32% for men. What’s more, this trend has continued as we have emerged from the pandemic.

Research shows that a staggering 40% of female entrepreneurs launched their businesses as a direct result of COVID-19. And LinkedIn data mirrors these findings, showing that female members on the platform who had changed their title to "founder" during the pandemic had more than doubled when compared to the pre-pandemic average.

While some undoubtedly started businesses to pursue their passions, many in this period likely became necessity entrepreneurs. In the face of economic hardship and inequitable workplaces, these female founders sought to take control of their careers and their futures. It is a known fact that women were the most severely affected by the impact of COVID-19 in our country. In fact, of the 3 million South Africans who lost their jobs because of COVID-19 and related lockdown, 2 million were women. We also saw gender-based violence increase during lockdown and we continue to witness the scourge of abhorrent acts against women and children.

Despite these issues and the widely entrenched and unacceptably high unemployment rate, the number of women-owned businesses in South Africa rose to 21.9% in 2021 versus 21.1% in 2020. The fact that the entrepreneurial activity of women increased during a time when many other economies did not, and that necessity-driven entrepreneurship amongst women overtook that of men, are reflective of the resilience and survival mindset of South African women.

The data shows that supporting these female-owned businesses is both the right and smart thing to do. It is no secret that women drive the world economy, controlling up to 85% of consumer purchasing decisions. In our country this point is of particular significance given the high number of female-headed households, which was estimated at around 38% just two years ago. Given the economic power that women have, it makes commercial sense for more women to run these businesses.

As a global technology investor and operator, we at Naspers have seen first-hand the crucial role that women play in helping to build economies and businesses fit for a more inclusive future. I am seeing more and more South African female entrepreneurs who run thriving needs-based technology businesses. Take Naked Insurance, for example, which we invested in through our early-stage tech investment vehicle Naspers Foundry. Built from scratch and free from legacy processes, Naked, co-founded by Sumarie Greybe, is improving financial inclusion for ordinary South Africans by pioneering a business model that aims to restore trust in how insurance works. In the marketplace category there is Naspers Foundry-backed and women-owned home services platform, SweepSouth. The company has grown beyond our borders into Egypt, Nigeria and Kenya, and the platform has facilitated employment for more than 30,000 women and at decent pay.

The number of programmes to support young women to pursue tech businesses and careers are also encouraging. GirlCode is on track to educate 10 million women and girls with tech skills by 2030 and Africa Beyond 4IR is making progress in breaking digital gender stereotypes and advocating for more women entrepreneurs in the digital space. We need to harness potential from a young age and equip the next generation of women leaders with the skills they require to shape a more inclusive tech ecosystem.

Our youth social impact programme, Naspers Labs, is designed provide young people with in-demand digital skills for roles in software development, cyber security, cloud computing and data science, amongst others. One of the programme’s aims is also to encourage more women to pursue STEM careers – currently 65% of Naspers Labs’ beneficiaries are women.

The words of Dr Ngozi Okonjo-Iweala, the very first woman and African to head the World Trade Organisation, ring true: “Investing in women is smart economics, and investing in girls, catching them upstream, is even smarter economics.”

Of course, encouraging more women to start businesses and not providing them with adequate capital for growth is like sending talented mountain climbers up Kilimanjaro without boots, oxygen, and a tent. Few will make it to base camp, and for those that do, the odds of survival are low.

For all ambitious female business owners that we are seeing emerge, obtaining the right funding to help them scale and grow is often the missing piece of the puzzle. At Naspers, we know that investing in women, means investing in South Africa’s collective future. But, when we hold the mirror up to ourselves, we also recognise that as an organisation there is a lot more we can do. Redressing the funding gap is not an overnight mission but one that will take time and consistent effort.

And we are addressing this mammoth challenge of a more diverse tech ecosystem from many angles; supporting female founders through Naspers Foundry, training graduates with tech skills, through Naspers Labs, funding young women to be able to enroll in university, through the Naspers Bursary programme, and employing and developing women in our own organisation. In pursuit of Naspers’s transformation goals, we are proud that as of March this year, 64% of our workforce is made up of females and 71% of our top and senior management are women.

Women are indeed playing a more meaningful role in our economy, but we need an accelerated path to address the many challenges that hinder their progress. Creating the right socio-economic and political conditions for women to thrive is of paramount importance for our country’s economic growth. Women are able to do a lot in a very difficult environment - imagine the contribution we could make if we had the right conditions.

This op-ed piece was published in City Press on Sunday, 21 August 2022.